Sherman Oaks Multifamily Property Trades for over $23 Million
“Multifamily real estate investment firm Westgate Group Inc. was recently forced to sell a 98-unit apartment complex it built in 2009 in Sherman Oaks after being unable to get permanent financing to replace the project’s construction loan. The May 22 transaction underscores the notion that despite some improvement in the economy, credit markets remain tight while the rental market is still soft. John Lu, owner of the West L.A. company, said he would have liked to retain the building at 15357 Magnolia Blvd. until the market recovered. Instead, he sold to real estate investor Avi Rojany for $23 million.
"It’s not exactly what I wanted. But at this particular juncture, it’s difficult to get a take-out loan to cover the construction loan," said Lu, who added his problems were compounded by rental rates 15 percent lower than initially projected.
The building was once appraised to fetch $28.5 million at full occupancy, said Clark Everitt, a broker with Investment Real Estate Associates who represented both parties. The building has been open for about nine months and was 70 percent leased when the deal closed. Rojany believes he bought the property at 70 cents on the dollar, considering land and constructions costs.
"It’s a nice building," said the West L.A. businessman. The building has 39 one-bedroom units, 57 units with two bedrooms and two with three bedrooms. Everitt said the average monthly rent for the one-bedroom units is $1,600 and $2,000 for the two-bedroom units. Everitt’s brother, William Everitt of IREA, also represented both parties.
(Originally reported by LABJ June 28, 2010)
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Sherman Oaks Multifamily Property Trades for Over $23 Million
In a sizable LA-area multifamily acquisition, a private investor purchased Magnolia Apartments, a 98-unit asset in the San Fernando Valley. The complex was constructed in 2009 and is located at 1537 Magnolia Blvd, near the intersection of the 405 and 101 freeways in the Sherman Oaks area of the Valley. The purchase price was just over $23 mil, or about $235k/unit. We're told that this represents the largest multifamily transaction in the San Fernando Valley so far in 2010. Common area amenities include a pool with a spa, a large recreation room, state-of-the-art fitness center, and a built-in BBQ set amongst park-like gardens. In addition to the individual unit security systems, other safety amenities include controlled access parking and a secured and gated entry. Clark Everitt and William Everitt of Investment Real Estate Associates represented the sellers, 15357 Magnolia Associates LLC and Westgate Group, and the buyer.
(Originally Reported by RENTV June 24, 2010)